Lender conveyancing panel requirements re Deed of Postponement Indemnity Insurance
Yorkshire Bank Home Loans and Accord, like most mortgage companies, have their own requirements when it comes to deed of postponement indemnity insurance. The purpose of this page to assist conveyancing lawyers on the numerous bank solicitors panel where the title to be charged incorporates deed of postponement. Solicitors should still check the Council of Mortgage Lenders’ handbook requirements for each lender, whether it be Coventry BS, Bank of Scotland or HSBC. The content on this page Is not to be read as deed of postponement indemnity insurance advice.
Need help with deed of postponement indemnity insurance from your lender?
Skipton and Godiva Mortgages in common with the majority of mortgage companies, requirements are that where deed of postponement indemnity insurance is to be taken out:
- you must disclose to the insurer all relevant information which you have gathered
- the deed of postponement indemnity insurance policy must be for the benefit of the lender and, wherever possible, for the benefit of the borrower and any subsequent owner or bank. Where the mortgagor will not be covered by the deed of postponement indemnity insurance policy, you must advise the mortgagor of this fact.
- your firm is duty bound to explain to the borrower that the borrower will need to adhere to any conditions of the deed of postponement indemnity insurance policy and that the borrower should notify the lender of any notice or potential claim in relation to the policy
- you must approve the terms of the deed of postponement policy on behalf of the lender
- the deed of postponement indemnity insurance policy must be effected without expense to the mortgage company
- the minimum level of cover for the policy must satisfy the requirements for the lender (See Part II Handbook requirements )
- the deed of postponement indemnity insurance policy should not incorporate terms that you are aware would invalidate or prejudice the interests of the bank
- your firm must supply a duplicate of the deed of postponement indemnity insurance to the borrower and explain to the mortgagor why the deed of postponement indemnity insurance policy was effected and that a further policy might be mandatory if there is supplemental borrowing against the security of the property
| Lender | Requirement |
|---|---|
| Accord Mortgages | An amount at least equal to the amount of the mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgagee. |
| Adam & Company | The open market value of the property according to the valuation report. |
| Bradford & Bingley | Amount of loan + 15% |
| Cynergy Bank | The market value of the property. |
| Foundation Home loans | An amount equal to 110% of the valuation or purchase price - whichever is the greater. |
| Habito | Higher of purchase price or valuation |
| Halifax | An amount at least equal to the mortgage advance. |
| Holmesdale Building Society | 110% |
| Intelligent Finance | An amount at least equal to the total of the initial mortgage advance plus any pre-agreed reserve. These amounts will be shown in the mortgage offer. |
| Mortgage Agency Services | 110% of the purchase price or valuation, whichever is greater |
| National Westminster Bank | An amount equal to the value of the property. |
| New Street Mortgages | Must be for a minimum of 110% of the purchase price or valuation whichever is the greatest. |
| Paragon Mortgages Ltd | An amount at least equal to the stated value of the Property. |
| Precise Mortgages | An amount at least equal to 110% of the mortgage valuation. |
| Saffron Building Society | Higher of purchase price or valuation. Any indemnity insurance policy must be for our benefit, that of any transferee/assignee (legal or equitable) of the mortgage and also the borrower(s). |
| Santander | The purchase price or (if lower) 110% of the mortgage advance. |
| Royal Bank of Scotland | An amount equal to the value of the property. |
| Tipton Coseley Building Society | Minimum of mortgage advance. |
| Yorkshire Bank | Open market value of property. |
| Yorkshire Building Society | An amount at least equal to the amount of the mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgagee. |
Non lender-specific considerations
The full terms, conditions and exclusions for deed of postponement indemnity insurance are identified in the policy paperwork. Conveyancing solicitors should point your non-lender client to the deed of postponement indemnity insurance policy itself. The intention of deed of postponement indemnity insurance is to grant indemnity in respect of the risks set out in the policy schedule - so you should check the schedule to determine that it is in order. The duration of this non-investment insurance agreement is in perpetuity unless the policy says something to the contrary. Adequacy in this regard should be checked.Important characteristics and benefits of deed of postponement indemnity insurance :
The insurance will normally cover where someone claims to be entitled to the benefit of the specified risks, stated in the deed of postponement indemnity insurance schedule. Deed of Postponement indemnity insurance Cover normally includes- Money paid with the written consent of the insurance company to liberate the property from the risks specified in the deed of postponement insurance.
- The cost of works (including architects’ and surveyors’ fees) for the purpose of the development started, prior to proceedings for the enforcement of the risks specified in the deed of postponement policy, to the extent that such costs are rendered abortive by court order.
- All other costs and expenses incurred by the Insured with the written consent of the relevant insurance company
- The cost of altering or taking down all, or part of the development and the reinstatement of the land, insofar as such alteration, demolition or re-instatement is made necessary by court order.
- Loss in market value due to the successful enforcement of the risks specified in the deed of postponement insurance.
- Reimbursement for compensation incurred in any proceedings in respect of the risks specified in the deed of postponement indemnity insurance, including legal and associated costs.
Due diligence should extend to checking that the answers on the application form are correct. However remote the likelihood of a claim on the bank insurance policy might be you can certain that the insurer will check the details on any proposal form very carefully prior to any claim being admitted.
Deed of Postponement Indemnity Insurance has limitations - Additional considerations
Deed of Postponement insurance may satisfy lenders such as Lloyds TSB or Leeds Building Society and prevent clients from from suffering financially but it cannot compensate for the stress and inconvenience the emotional suffering - after all the value of a home cannot always be measured in cash in the eyes of the owner. Content on this webpage is for general information for conveyancers and solicitors in England and Wales on the the lender conveyancing panel, it does not constitute advice for members of the public who should contact their lawyer for advice relating to the bank indemnity insurance. Whilst we endeavour to keep the information up to date and correct we do not make any representation or warranties of any kind about its completeness, accuracy, reliability or suitability. Any reliance you place on the information is strictly at your own risk. Lexsure will not be liable for any direct or indirect loss or damage arising out of or in connection with the use of this information.
An important exclusion applying to most deed of postponement Policies is if you make any contact with any party who might cause a claim under the Policy, it can invalidate the cover.
The content set out above covers to properties in England and Wales.